The failure of the vertical electric business: VC Drive mode bankruptcy mergers and acquisitions increased

Over the past few years, the domestic vertical E-commerce experienced a roller coaster general excitement, out of control, and return to reality after the calm.

The peak of financing for vertical electric dealers dates back to 2010. Macaulay, Dangdang listed, the capital to a new round of climax. Public information shows that in 2010, the electricity dealer financing more than 24, the amount of 600 million U.S. dollars, 2011 Electric Business Financing 95, the total amount of more than 4.691 billion U.S. dollars innovation high.

In the era of e-commerce investment overheating, the birth of a group of Internet-owned brands, such as personal apparel business-dimensional cotton, Internet women's brand first carved, home textiles 100, men's brand NOP, etc. at that time, the earlier batch of vertical electric dealers such as Amoy, good buy price war is hot.

In the vision of these electric dealers, there will soon be a next round of money, hoping to expand by burning money. According to elegant 100 founder Chen Tenghua (micro-blog) at the beginning of business planning, 2012 elegant 100 sales target is billion. Similarly, Cotton has expected 2011 sales will be broken billion, and said that 50% of sales for advertising.

But it backfired. Starting in the second half of 2011, E-commerce investment environment plummeted. Victoria Cotton started a round of financing from 2011, but August 2012 was still unfinished until the capital chain broke down and was forced to stop operating.

Now, the first moment by all the buyers, Lok Tao transformation of its own brands face challenges, elegant 100 from the beginning of last year to strictly control the market costs, including advertising, gift certificates. "In 2011, we worked with group buying to send a lot of coupons, in fact, some false prosperity." Will users come back after they run out? Not。 Chen Tenghua.

"For the first moment, there is at least hope for the sale to the visitors." A brand, the need for commodity quality assurance, the need to go up and down the supply chain, the accumulation of style judgments. Accumulation is the operation of the market constantly trial and error to correct the process, trial and error is the need for money. The more money, the more the frequency of the test, the faster the optimization, the quality of the more assured, the more distinctive brand. From the point of view of the founder Xu Xiaohui (Weibo), the present situation is not up to the state he wants. Said a person in the electric business industry.

Still in the independent development of the vertical electric dealers have to reduce costs, their own hematopoietic, settled, sell and other ways to save themselves. It can be expected that in this process, a group of vertical electric dealers will be eliminated, a group of electric dealers will be acquired, there will be a number of vertical electric operators will survive independently.

Capital promotion is never a stable state. Some entrepreneurs say VC is starting to deal with some of the projects in hand. VC has to face the reality is: Each fund has a short 5-8 years, a long 8-10-year cycle limit, when the capital maturity or lack of patience, can cause the project to resell or sell.

Under the condition that the platform-type electric trader forms the value depression and the VC driving mode is unsustainable, the only thing the vertical electric trader can do is to cultivate its core competence, to find the fit point of vertical and scale, and to develop its own hematopoiesis ability. By the time they form a unique value, these surviving electric dealers will be ushered in the spring of capital markets.

VC Drive Mode Bankrupt

In the case of the cold reality of the investment, the VC-driven development mode of the electric quotient will be terminated.

Investment sector people pointed out that the so-called electric business in the cold winter, on the one hand, the capital market to the electrical business return to rationality, aware of the essence of commerce (E-commerce) or commerce (business), or to make money, and no magic. On the other hand, the platform of the power of the opportunity has no longer exist, the image of the subdivision of the business to play a large discount for VC less attractive.

"Investors in a, B round, is to give you the money to prove that your concept is feasible." In the C round, it depends on where you are in the market. and D-round, you have to tell investors a clear path to profitability. Many people mistakenly believe that investors do not vote for me, is the investment is too cold, in fact, different stages of your evaluation criteria are different. "Warburg Huang Jo, capital investor, said.

In addition, for investors, the project return cycle is not unlimited. VC Unit is a fund, most of the fund's cycle is 6-10 years, when the fund needs and VC checkout.

Therefore, in the case of a fund, it will not survive indefinitely, and the investment return cycle of the project is not unrestricted. This is one of the reasons for the sale of vertical electric dealers.